By Peter Egwuatu
Indication has emerged that following the market forecast, Conoil Plc shares last week sustained an upward trend.
Stockbrokers stated that the rise in demand for Conoil shares is an indication of substantial improvement in the companyâ€™s performance and favourable return on investment for its 2009 financial year.
The Conoil share price has been on the decline in recent time at the secondary market, a reflection of investorsâ€™ apathy.
Owing to the increase in its demand, the equity consistently topped the price gainersâ€™ chart for the better part of last week, causing the oil marketing company to record 15 per cent capital appreciation in three consecutive days. The share price recorded a growth of N5.37, which represents 15.7 per cent, between Monday and Wednesday.
At the opening of the weekâ€™s trading last Monday, Conoil was atop the gainersâ€™ table with N1.70. It added N1.79 on Tuesday and N1.88 on Wednesday to close at N39.54 per share.
Stockbrokers expressed little surprise at the current fortune of Conoil shares in the market, saying investorsâ€™ renewed confidence in the equity was only natural considering the companyâ€™s pedigree as an organization with a consistent dividend policy.
The companyâ€™s strong showing on the Exchange was also attributed to the huge investments and expansion projects it has embarked on in order to improve its turnover and return on investment. According to a stockbroker: â€œWhat is happening is that investors are beginning to plot their graph and positioning themselves so as to be beneficiaries of the bumper harvest that analysts have forecast for Conoil.â€
Stockbrokers are of the opinion that Conoil will continue to appeal to investors in the petroleum industry because it has demonstrated enhanced capacity to withstand major industry difficulties and come out head high at robust health.
It would be recalled that Chairman of the company, Dr. Mike Adenuga (Jr.), during its 39th annual general meeting, disclosed that the company would further enhance its operations and sustain its enviable record of profitability and shareholder value.
For the financial period ended December 31, 2008, the company paid a dividend of 100 kobo on every 50 kobo ordinary share. It recorded appreciable growth in turnover, posting N124,322,434, which represents 43 per cent increase over the N86,847,548 recorded in the previous year.
The gross profit stood at N3.28 billion against N3.76 billion recorded last year, while the net current assets dropped by 9 per cent, from N6.14 billion to N5.59 billion. Industry watchers said the performance reflected the general trend in the industry and commended Conoil for paying 100 kobo dividend to shareholders at a time when many other companies declared no dividend at all.
Giving insights into the future of the downstream business, Adenuga said the company has stepped up investments in the core segments of the downstream business, including retail, lubricants, aviation, specialised products and non-retail business, with a view to strengthening its competitive edge and breaking new grounds to boost its market share.